The FUBU Founder Got Rejected By 27 Banks. Then His Mom Bet the House. | Ep. 430 with Daymond John Founder of FUBU

0:00I got turned on my 27 banks. I went to my mother and she said, this is all we have. The house is worth$75 ,000. She gave me$100 ,000. Months later, I was down to$500 left and I was three months late on the mortgage. What's been the price of success and fame for you? That one-hour surgery became five and a half hours of removing a golf ball size of stage 2 cancer. I didn't know I had. He built FUBU into a global brand with over$6 billion in sales, and he turned that into 17 years on Shark Tank. This is Damon John. In this episode, he opens up about the real price he paid to build a brand the world couldn't ignore.

0:39I was kind of like that guy, I'll sleep when I'm dead. Well, I was almost dead because I didn't sleep. What would be more valuable? Is that capital, AI, or reputation? The only thing you can't replace that you can't buy is a reputation. today everybody has the same price of fame because everybody could turn on their phone the price of fame is

1:05damon john it's great to have you we were just mentioning quickly that we've come across interacting with you a few times in our life and they were really interesting times was one of them i want to go back to starting with this is clubhouse do you remember clubhouse yes of course i remember clubhouse it was great yeah my name i was the pivot queen you've been in oh yes i do know you from that name yeah we normally have something called an artifact which is an object that means something to you during your business journey what is one thing from the fubu days that you will keep forever oh my my gold chain my medallion my fubu medallion why is that significant growing up in the hood everybody had their chains when they were you know somebody with the def jam you know we'd go there then my friend had murder ink with uh herve goddy and the drug dealers had there then that was our emblem the full emblem We put it in so many, you know, as movies, you know, various other things.

2:13But that was it. That was that was we made it. We got our own emblem with real diamonds, actually. Was that always intentional that you said we need to create this logo? We need to build the brand around it. Or is that just organic? No, that was always very, very intentional. It was, you know, brand identity. We knew that it got so intentional that there was a point where MTV and BET would blur any logos of brands that were not paying to be on the network. And so they started blurring the FUBU logos. So there was always an O5 that we used to represent the five of us, even though there's four of us, because the fifth member never stuck around.

2:55And there's 10 people running around talking about I'm the fifth member of FUBU, just like the five Beatles, right? And so when we started putting these football jerseys in, they wouldn't blur numbers because the number didn't mean anything, right? It was a football jersey. But because this was 98, 05 didn't actually happen yet. Nobody had ever said found it in 05. So we were able to trademark that 05. So I think there's only a couple of marks that are on the numbers, BMW 323, 05. And then people started recognizing us as 05. We'd never get blurred. So that's how strategic we were about, you know, logo and branding.

3:33You know, you made it when MTV is blurring your brand. That's when you made it. There was an interesting time in our life back in 2017 was the first year that we won the Inc. 5000 list. And the amazing thing about that was you were the keynote speaker. Again, we ran into each other. Yes. Yes. This is the thing. Yes. In Palm Springs, this was the first time. And it was an interesting time because our business was to the moon, but it also was falling apart at the same time. And you said something on stage about your mom mortgaging her house to give you$100 ,000 to save the business. Can you tell me about that story?

4:15Yeah. So, you know, I started Fubu in 89. I closed it down three times from 89 to 92. I ran out of capital, but I didn't run out of a lot of money. I ran out of$1 ,000,$5 ,000. This is what I try to tell founders run out of a very small amount of money. But in 1992, I think 1994, I went to the magic trade show, the trade show, the fashion industry, and I wrote$300 ,000 worth of orders. Well, now I got to come home. I got to make the orders. And I went to 27 banks. I got turned down. I went to my mother and I said, you know, I got turned down by 27 banks. And she said, you know, you've been working in this house ever since you were 10 years old.

4:53I started working at 10 and whatever I can contribute, I contributed. And then right around 18, I actually started paying a lot of the bills. And she said, this is all we have. Why don't I go out and I take a loan on the house and, you know, you manufacture, deliver the clothes and put the money back in. And so I pitched her on that. The house is worth$75 ,000. So I still don't until today ask her what the hell did she do for the rest of that money. And I always say shout out to moms. and uh you know she gave me a hundred thousand dollars and i will put it to work and you know be very honest though this story really is that in six months later i was down to five hundred dollars left and i was three months late on the mortgage because i didn't know how money worked i was using it you know i was paying it in advance for raw goods i was paying for my salary staff and shipping into my accounts receivables at the time i should have taken cod but the stores will only give me 30, 60, 90 days.

5:48So I was being choked by the float. And then mom again comes to the rescue and says, I have an idea. She takes out an ad in the newspaper for something like million dollars in orders, need financing. And 33 people call that ad. 30 of them were loan sharks and people like nasty people like Kevin O 'Leary. But three of them are real. And one was Samsung's textile division. And then we took off after that. But it's all because of mom believing in me. Damon, did that moment change the way you look at risk today? It did not change the way I looked at risk today. What would change later on would be, you know, running the company, knowing that the biggest pains we had or the shortcomings we had came from over inventory.

6:36Or sometimes we blow a lot of money on a new project because we could throw money at it. And so there's two different forms of things. There's two different things I learned. Number one, inventory is over inventory. And it kills most companies, whether over developing, over inventory. And also just throwing money at a problem doesn't solve a problem. Money can often highlight your weaknesses. If you have a weak advertising campaign, you say buy more time, that ain't going to increase the conversion. If you have poor goods or garments or products and you say you need a better margin. So instead of buying a thousand units, buy 10 ,000 units.

7:13It's not going to increase the viability of the garment and or the product. I have to say that 2017, Damon, you kind of gave me hope because I was in that situation where I lost$6 ,000 a day revenue of e-commerce and Amazon down my account. So I was pressed to the wall. But you share that story about your mom. It kind of gave me hope. So thank you for that inspiration. Let me tell you about a time that Upwork saved me. I had two hours to get a submission to a major media outlet, and I thought there was no way I'd make it. I jumped on Upwork, messaged someone, and within 10 minutes, they replied.

7:4990 minutes later, the work was done in my inbox, submitted on time. And here's the best part. Two years later, that same person still works with me today. Upwork is where businesses find highly skilled freelance professionals for specialized work from software development and AI implementation to marketing design business operations. With Business Plus, you can access the top 1 % of talent on Upwork. AI shortlisting matches you to top freelancers in under six hours and with over 170 ,000 five-star freelancers, you can hire with confidence. Visit upwork.com right now and post your job for free.

8:33That is Upwork.com to connect with top talent ready to help your business grow. That's U-P-W-O-R-K.com, Upwork.com. August is the perfect time to hit reset before the autumn rush begins. And honestly, I can't think of a better place to start than my closet. That's why I love shopping at Kintz. Kintz is all about fewer, better pieces. Their clothes are made from premium materials, built to last, and designed to become the ones you reach for day after day. For me, that's a pair of pants and a shirt that have quietly become my favorite things to wear. I am not great at choosing good clothing, but my wife even loves it.

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9:57That's Q-U-I-N-C-E dot com slash founders. Well, I'm glad I could help and thank God mom helped me so I could pass that information on to you. Something that I've seen is critical for most founders. And I've watched this with Kate because she's a part of a certain organization is being around people that you can confide in, that you can talk to, that get it, that understand you. It sounds having that community around you is so critical because it can be so lonely. What inspired you about CEO access and does it go back to that time? Well, thank you about asking about CEO access. So the concept though of what you're talking about is absolutely.

10:37So that's why when you pitch people, if you have something going, really, you feel this promising at a certain point, you got to get a board of advisors or advisors. This is people co-signing to say that I believe in this person and I'm signing on because it's lonely. You know, the higher you go, the more lonely it is. You know, a true entrepreneur, the reality is that you've got to listen to everybody else's problems. You can't tell anybody your problems. You know, you have financial stress at home. Your relationship's on the rocks. You know, your customers all want you and they don't want anybody else.

11:11And, you know, you never know if you're going to pull money out of the company. Everybody else gets paid. UPS gets paid. Software developers get paid. You know, leases get paid, you know, whatever the case is. So there's really nobody to talk to. And at the end of the day, there's a lot of people that have the same issue. But you have to try to seek out people who've been there before who don't need you. and the trade-off is what is the trade-off right because you know if they don't need you then what's the trade-off you got to find something that like like you are with your customers you got to find a pain point in their life that you can add value to and so that's what I do with other CEOs you know there's a lot of CEOs in the world and founders in the world that you know 10 years ago 20 years ago they didn't really need to brand themselves to be known it was kind of like make it and they will come but today people don't only want to know what they're buying and who they're buying it from.

12:00They want to know what have you done lately, not only for me, but for somebody else. And most CEOs and founders think about the level you get to. You know, you want to be known for the right things. You got to brand yourself. But is it one PR person? Is it your secretary? Do you become part of YPO? What about asset protection? Now you're known, everybody's coming after you to sue you. How do you protect yourself? You know, what about putting money aside for future plans within the company? How do you look at an exit? What's going on in work-life balance and what's up with your kids? You know, there's a lot of things that, unless you've been through it, where are you going to go get those answers from?

12:40You know, so that's what we do. We manage CEOs. And then more importantly, we manage their voice in the market and how they're looked at and represented because it's an obligation to be a CEO. And today, I say it all the time, the kid in the mailroom with 10 ,000 followers decides to lie and say that you've done something that you really haven't done. You got to call spin doctors and everything else. You know, a news cycle is 24 hours. You're done. People lose their jobs. You lose funding. You know, you got a lot of problems going on. So you've got to be in front of it as CEO because that's your obligation.

13:13That's your fiduciary duty to the company. Damon, in the next 10 years, what would be more valuable? Is that capital, AI or reputation? reputation you know ai is of course is valuable now it takes every it takes so many uh different things out of your way and it can it can create 80 of the work done and then you put your hand on it right capital is readily available if you have something great capital is there whether you take a loan whether you you leverage you get pre-orders you do strategic relationships remember capital opm is not other people's money other opm is other people's mind power manpower manufacturing marketing you can definitely make money off other people's mistakes but the only thing you can't replace that you can't buy is a reputation you can't buy your legacy you can't buy you know you know uh your ethics you know you can't buy those things and the ease and today we don't know when when i don't even know if you both of you are real now you both could be avatars i have no idea you know what i'm reading where's it coming from what this video is but you cannot uh buy legacy mistakes and things like that.

14:22And that's what people want to know these days. They want to know your unique perspective on why you built this or why you're the person to work with. And that's what I said. The easiest thing to sell is the truth. So they told us you're Damon AI, by the way. Let's just say back when you started Shark Tank, social media is what it is right now. And you can either go on traditional TV and do a show like Shark Tank, or you could just focus on social media. Which one would you choose? I am Damon AI because I keep studying and trying to jump into the rope. I'm studying a lot, but you know, am I proficient at Claude or some of these other things?

14:59Not yet, but that's all I've been concentrating on the last two years, getting my team in it, surrounding myself with the right people, seeing where it's going. And I am getting into it. But I always say in business, the closer you are to the money is the more successful you'll be. You need to be one step away from the money. Having a TV show is great, but will ABC pick it up from Sony? Will it be on Wednesday night? Will it be on Friday night? Will you see it? Will I get the proper edit, the proper cut? I have no idea. With social media, I control myself directly. Who saw it on Shark Tank? Who saw Shark Tank on ABC?

15:37I don't know. And is it airing on what is one of the streaming networks? They don't tell you how many people sort. What's the demographic? But in your social media, you know, you can you can, of course, obviously know who they are, get them to follow you in different ways, get them to tell you more importantly what they hate about you. And you're one step away from the money. How do you handle the haters? I fall apart. Yesterday, somebody put a comment that wasn't it wasn't bad, but it wasn't great. I deleted it. Why'd you delete it? I don't know. It really impacted me. People say something about me for some reason.

16:14I can't handle it. Well, first of all, here's how I deal to haters. I've been sitting next to Barbara and Kevin for 18 years. They are the king and queen of haters. So first of all, I've been baptized by fire. The second of all, you know, haters are usually somebody who just wants to be you. And it's not my job to wonder what have went on in that person's life. That person could be somebody in a trailer park and a little underwear that, you know, the rag is all broken out. They're 12 years old and they're just pushing your button. Haters are dirty pom poms. Their cheerleaders are dirty pom poms.

16:54You know, so I look at it as we all know people that, you know um they talk about somebody else but they go oh that person just doing this just doing that and then you say shit i need to call that person because if this person's talking about them like that there's something there so you know you gotta just ignore the haters and when you delete them and when you answer them back you know you're feeding you know their need for what they want to do um the only time that i i answer haters i answer them a couple of times i'll answer them with, I'll give them, they'll say it really raw and I'll give them the answer to why this happened a little bit raw and be like, you know, I'll give an example.

17:33You know, people never recap, they never read the copy. So they'll, oh, you should have done this and this and that, this and that, you know, I can't wait to, you know, this and this and that. And then I'll go, well, by the way, I'm dyslexic and I at least know better enough to make a stupid ass comment like that until you read what's in there. I'm sure you'll get that next time, but thank you for the comment with the hands up. You know, sometimes, you know, they come back around and be like, you know, at least you answered me. So anyway, haters, if they're not hating, you're not doing something right.

18:12You're not important. You're not important. That's the challenge of building your personal brand is obviously putting yourself out there. Kate, something I think you've done good at is trying to influence more influential people versus every single human. Can you talk about that? Yeah, I think you have to master the craft of storytelling. Damon, do you agree? Sharing a story with humility that attracts people that are successful rather than braggy online. Damon, what's your take on that? Absolutely. So, you know, you're never going to have a bigger brain and a bigger wallet than somebody. Somebody's always going to have a bigger brain, bigger wallet.

18:54Mark Cuban wants to get on and brag about his money. You know, that sounds good to me, but Mark Zuckerberg is going to laugh at him. Zuckerberg brags about his money. Jeff Bezos is going to laugh at him. And Jeff Bezos brags about his money. Elon Musk is going to laugh at him. Elon Musk brag about his money. BlackRock is going to laugh at him. So you got to think like that. But first of all, you know, when you do that and you're puffing out your chest, the people think either you're OK, you don't need anything or they're laughing at you because the ones who have been there before know that you're a fake peacock.

19:27When you act with vulnerability and you come in there and say, man. I know a lot about this. I don't know about that. And if you got two seconds to help me know about that, man, I will do everything I can about this for you. Or I say it all the time, some of the most interesting conversations I have is you walk in the room, you say to somebody, why don't you tell me about yourself? They will talk for 45 minutes. And when they're done, they go, man, you are such an interesting person. You're right about that. So, you know, communication is the only thing that separates us from the animals. And to make somebody feel special and to make somebody feel like they added value to you, you know, they'll fight for you after that.

20:07Did you ever have somebody who didn't believe in you? And when you were just featured in the Forbes 250 list, they came to mind and you said, F you. Well, most people have not believed in me. Partners that have made a lot of money when I said I'm moving on to do this, you want to do it? No, that'll never work. Most people have not believed in me. I would say even half my staff doesn't believe in me. They are, you know, you can't have your staff. You can't think that your staff's going to run your business like you are. Some of them are there because they're transitioning out of high school, right?

20:46Some of them because they're taking care of their families. Some of them because, you know, whatever the case is, right? You don't expect it. I find that the people that believe in me tend to be the people who don't analyze it. They go, so now I got to tell you, I got four staff members, three staff members that have been with me 30 years. And I got another 15 that have been with me 20 years. they believe in me but they don't go i believe in damon uh meaning i believe in this project they go i believe in damon right because you know you think of me on the shark tank oh this guy in his suit oh he did he's all put together oh no oh no willy walker's factory got a lot of chocolate on the floor and because i'm an entrepreneur by nature i come up with these ideas like oh we're gonna do this thing go co access you know five years ago what are you talking about or i come up with something, say, we're going to go live selling or I'm going to be a biohacker.

21:41How can you be an expert in biohacker? You know, you got a couple pounds on you. You love sugar, right? You love carbs. You're not a scientist. You're definitely not a doctor. And by far, you are not an athlete. Why the hell would you be a biohacker? But then later on, people go, wait a minute, maybe you are America's type of biohacker because you are not talking from the geeky, scientifical approach. You're not stuck like a doctor over here. You do have a crazy schedule, love sugar, love carbs, and you realize you got to enjoy life a little bit with this and that. But you're not perfect. And more people relate to that type of person.

22:18But when I first said it to my team, they were like, what the hell is wrong with this dude? He makes T-shirts for a living. You know, so again, nobody will ever believe in you. And that's good, though. You take that as prove them wrong, not in a nasty way. Let them question you, the tough questions. How are you going to get that done? Well, I'm going to get that done this way. I don't think you can. Okay, well, maybe I need to adjust a little bit. Maybe that's more interesting. You know, you got to convince them. If you don't believe in yourself, there's no reason for them to believe in you. Yeah, you tackle into relatability.

22:53And most entrepreneurs, they don't want to be vulnerable online. What can you share about that angle, Damon? So I've come to the point in my life where I'm, you know, I've had a good amount of experience. You know, let's give you an example. If you met a nurse who's been doing it for 30 years and a nurse who's been doing it for five, she can tell. She can look right through where the inefficiencies are or she doesn't know what you're doing. You don't it's up to you if you don't want to be vulnerable. But I already can see right through you because you wouldn't be an entrepreneur if you didn't take risk.

23:28You wouldn't be an entrepreneur if you didn't fail. You wouldn't be an entrepreneur if you weren't very, very hard on yourself and everything's not working out the way you planned it, but you're going to figure this shit out. You wouldn't be an entrepreneur if, you know, every entrepreneur you know is going to have, well, first of all, there's going to be a shortage of cash. Cash is the biggest, you know, need for money. The hardest thing to source is cash in people. You can't tell me that your whole team is good and great. You can't tell me that you have funding like that because, I'll give you an example.

23:56Robert Herjavec said, I had to sell my company. Now, he sold it for a large amount of money. I said, why? He said, because I was doing$800 million. No, I was doing a billion. And to get to$2 billion, I had to put in a lot more cash. You see the problem at that level? Elon Musk said that up until 2008, he spent his last$40 million. He broke out$20 million on SpaceX and$20 million on Tesla. And he said, it's either going to work or I'm done. So you got to understand, you know, when you talk about entrepreneurs not being, you know, don't want to be vulnerable, I can see right through you because by nature is for us to go hard.

24:40And after we go hard, something's going to hit the wall, whether it's your relationship at home, you know, whether it's people who betrayed you, whether it is, you know, people stealing. You didn't see that coming. you can't figure it all out as an entrepreneur. What has been the price of success and fame then? Entrepreneurs are kind of crazy. The most successful people I've met, there's something a little off because in order to go all in many times, almost on the brink of losing everything, you've got to have some extra in you, I think. But what's been the price though of success and fame for you?

25:18Well, it depends on what success is to people. The price of success, you know, the one price of success that I would have paid no matter what I, whether I was one of these great men and women working sanitation or keeping us clean from diseases and things of that nature. The price of success there, even if I was doing what Damon John does or what they do, is I would have worked every overtime hour I could because I had two little girls and every parent knows that I sleep in a refrigerator box to be able to give my girl shelter, education, and medicine. So I lost my first marriage due to, you know, me, you know, working crazy and stuff like that.

25:56Um, but I don't regret that, you know, uh, um, but you know, the other, the other price of success. Let me tell you about a time that Upwork saved me. I had two hours to get a submission to a major media outlet and I thought there was no way I'd make it. I jumped on Upwork, messaged someone, and within 10 minutes, they replied. 90 minutes later, the work was done in my inbox, submitted on time. And here's the best part. Two years later, that same person still works with me today. Upwork is where businesses find highly skilled freelance professionals for specialized work from software development and AI implementation to marketing design business operations.

26:41With Business Plus, you can access the top 1 % of talent on Upwork. AI shortlisting matches you to top freelancers in under six hours and with over 170 ,000 five-star freelancers, you can hire with confidence. Visit Upwork.com right now and post your job for free. That is Upwork.com to connect with top talent ready to help your business grow. That's U-P-W-O-R-K.com, Upwork.com. August is the perfect time to hit reset before the autumn rush begins. And honestly, I can't think of a better place to start than my closet. That's why I love shopping at Kintz. Kintz is all about fewer, better pieces.